With criminals finding new ways to target residential homes while residents are on vacation, homeowners should make a habit of reviewing their insurance policies annually to ensure their personal property is properly insured.

Policyholders often overlook sublimits on certain items, especially expensive collectibles, jewelry, and watches. I’ve previously written about coverage for trading cards; similarly, if you own high-end jewelry or watches, you should be aware of the “Special Limits of Liability” within your policy (often referred to as sublimits), which reduce the amount insurance companies need to pay you when a covered loss occurs. These limits do not increase the coverage for Personal Property but are instead used by insurance companies to reduce the payout for specific items.

In handling cases for celebrities and people with luxury item collections, I’ve learned that many clients believe having a high limit for “Personal Property” is enough to cover their cash, watches, jewelry, wines, art, and antiques. However, sublimits in many standard homeowners policies limit payments on the following higher-value items:

  • Jewelry, watches, furs, precious stones
  • Money, coins, bullion, medals
  • Silver tea sets, trays, trophies
  • Firearms
  • Computers
  • Antiques, fine arts, paintings, memorabilia, souvenirs, sports cards
  • Any type of collectible items, including stamps or sports/gaming card collections
  • Rugs or carpets
  • Cameras
  • Medications
  • Tools
  • Musical instruments

These limits are usually very low, ranging from $500 to $5,000, even if you have hundreds of thousands or millions of dollars in coverage for your personal property items. Making matters worse, these sublimits apply per loss, not per item. For example, if you owned Cartier Ballon De Cartier 42Mm Watch and also a Rolex Lady Datejust and both were stolen or damaged in a loss, the most your insurance company would pay is $5,000 total — not for each item, but total for the entire claim.

What can homeowners do to best protect these items against loss? They can ask their agents about other types of policies offered by their homeowners insurance companies that cover these high-end items, generally known as Scheduled Personal Property Coverage, but also called endorsements, floaters, or riders.

Scheduled Personal Property can be expensive but generally provides coverage for these specialty items. Other benefits of scheduling personal property are that insurance carriers will not depreciate items based on age and condition but can instead pay the actual replacement value. To get these benefits, the insured needs to obtain an appraisal of the item and ensure their appraisal is accepted by the carrier and up to date with current replacement costs.

Property owners can also use many tech-friendly insurance companies if they’d like to find a new carrier. Companies like WAX offer insurance for watches, handbags, and other jewelry without going through an agent. Users can take photos of their items and appraisals to find the right type of coverage they need.

The main lesson policyholders learn when they do not have scheduled property is that even though they’ve been paying premiums to insure almost a million dollars of personal property, it probably will not cover what you think it will.

Quote for the Day

Price is what you pay. Value is what you get.
—Warren  Buffett

Seeking Professional Help

At Merlin Law Group, we understand the pain and frustration that comes after sustaining damage to your property and business. When your insurance company is supposed to be there to help, they end up creating a second disaster by abandoning their responsibilities and their loyal policyholders. Merlin Law Group has been dedicated to obtaining justice for policyholders as they navigate their property insurance claims.

Merlin Law Group has successfully litigated and recovered damages of more than $100 million for an insured on a single case. Having a dedicated trial team, the financial resources to fight insurer delay tactics, and extensive network of damage mitigation experts has enabled Merlin Law Group to stand out from our competitors. For more information or to schedule a consultation, visit MerlinLawGroup.com, or contact our support team directly at (213) 374-0416.

Derek Chaiken is an experienced trial attorney who tirelessly advocates for justice on behalf of his clients. He has dedicated his practice to representing home and business owners in recovering compensation from their insurers and third parties when their property has been damaged. He has had significant success litigating on behalf of his clients at mediation, appraisals, arbitration, and trial. As a result of his professional accomplishments, Derek was named a Thomson Reuters SuperLawyers “Rising Star” from 2019-2022 and a “SuperLawyer” in 2024. For another recent post from Derek, see A Warning to Policyholders About the Vital Role of Disclosure During the Insurance Application Process: Tell the Truth or Face the Consequences.